3 more plead guilty in Seven Falls case

Investigation zeroes in on luxury golf course developer

Published: Wednesday, September 25, 2013 at 4:30 a.m.

Last Modified: Tuesday, September 24, 2013 at 5:25 p.m.

ASHEVILLE — All of the defendants in the Seven Falls fraud case — except for the luxury golf course’s developer, Keith Vinson — had pleaded guilty as of Tuesday afternoon, when three defendants agreed to plea deals in U.S. District Court.

Five of Vinson’s six co-defendants have also agreed to provide evidence against him in a trial now set to begin the week of Oct. 7.

George M. Gabler, who has worked as a certified public accountant since 1978, pleaded guilty to one count of withholding information about a crime. He faces up to three years in prison, $250,000 in fines and no more than one year of supervised release for the charge.

In an address before Magistrate Judge Dennis Howell, Gabler thanked the government, the court and his attorney for working “through a mountain of details to try to understand the complexities” of his case. Gabler was initially charged with bank fraud.

Aaron Ollis, who served as a real estate appraiser for 25 years in Western North Carolina, and Thomas “Ted” Durham Jr., a former president of Pisgah Community Bank, each pleaded guilty to one count of conspiracy to defraud the U.S. government. Both face up to five years in prison, $250,000 in fines and no more than three years of supervised release for the charge.

Ollis approached the defense table Tuesday and declined to comment on the case.

Court records show that losses ranging in amounts from $2.5 million to $12 million have been recorded in the investigation. Ollis, however, “did not personally profit from the transactions constituting these losses, except for the fees charged for his appraisal reports, which is approximately $7,000,” according to the plea agreement.

In the arrangement, Ollis agreed to pay full restitution.

He was added to the case in a superseding indictment last year and charged with conspiracy to defraud the United States, bank fraud and misapplication of bank funds. He initially pleaded not guilty Dec. 18.

Durham approached the defense table minutes after 3 p.m. and offered a voluntary plea of guilty. He also declined to comment.

Last week, real estate investors and private money lenders Avery Ted “Buck” Cashion III of Lake Lure and Raymond “Ray” Chapman of Brevard pleaded guilty to one count each of conspiracy to defraud the United States.

Like Ollis and Durham, they face up to five years in prison, $250,000 in fines and no more than three years of supervised release for the charge.

Cashion, Chapman and Durham initially faced a slew of charges from wire fraud and money laundering to embezzlement and defrauding the government.

In March, co-defendant Andrew Quinn Hager pleaded guilty to one count of conspiracy to commit bank fraud. He faces up to five years in prison and a $250,000 fine on the conspiracy charge, according to court records.

Hager, Cashion, Chapman, Ollis and Gabler agreed to provide evidence in the investigation, which now zeroes in on Vinson. The five defendants may be granted shorter sentences than provided by federal guidelines if prosecutors deem their assistance to have been vital in the government’s investigation and prosecution.

Their other charges are set to be dismissed at sentencing. They will not be able to appeal their pleas or convictions unless they can prove their case was botched by ineffective counsel or prosecutorial misconduct.

‘Counsel’ defense

A preliminary trial brief for Vinson alleges that the developer was acting on the advice of his attorneys when it came to certain actions aimed at keeping two flailing luxury developments afloat.

The 2008 “economic downturn” brought his developments of Seven Falls, a planned 1,400-acre golf course community in Etowah, and Queens Gap, a 4,000-acre resort in Rutherford County, “to a screeching halt,” according to the brief.

Vinson “anticipates that, as to at least some of the counts, particularly the counts relating to the so-called ‘lot loan program’ and ‘Queens Gap Fraud,’ that his actions relating to those offenses were based on advice of counsel.”

According to a bill of information filed Feb. 26, “the conspirators would solicit loans secured by undeveloped Seven Falls lots from several federally-insured banks. While the loans would appear to the banks as if they were traditional loans to individuals purchasing lots in Seven Falls,” they were in fact “short-term financing for Seven Falls and its developer, Vinson, who was unable to take out additional loans.”

In a 34-page superseding bill of indictment filed in December, Vinson and his co-defendants were said to have “devised and executed various schemes” to defraud and “obtain more than $23 million they needed to forestall the failure of their luxury residential development and golf resort.”

Pisgah Community Bank and the Bank of Asheville “had particularly heavy concentrations of Seven Falls-related loans,” according to the indictment.

Durham and former Bank of Asheville President George Gordon “Buddy” Greenwood “conspired to conceal the risks posed by Seven Falls-related loans from their shareholders, auditors and regulators,” according to the indictment.

Greenwood was found guilty of bank fraud charges and sentenced in May to four years in federal prison. Sentencing hearings for Cashion, Chapman, Durham, Gabler, Hager and Ollis have yet to be set.

Reach Weaver at emily.weaver@blueridgenow.com or 828-694-7867.

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